Vietnam: What is the certificate of PIT withheld at source? Do employees who conclude labor contracts for less than 3 months have the right to request income payers to issue certificates of PIT withheld at source?
- What is the certificate of PIT withheld at source in Vietnam?
- Do employees who conclude labor contracts for less than 3 months in Vietnam have the right to request income payers to issue certificates of PIT withheld at source?
- What are the contents of a certificate of PIT withheld at source in Vietnam?
What is the certificate of PIT withheld at source in Vietnam?
Pursuant to the provisions of Clause 1, Article 25 of Circular 111/2013/TT-BTC as follows:
Tax withholding and certificate of tax withheld at source
1. Tax withholding
Tax withholding is the income payer’s calculating and withholding the tax payable from the taxpayer’s income before paying the income to the taxpayer.
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At the same time, in Article 31 of Decree 123/2020/ND-CP, there are the following provisions:
Time of preparing records
When withholding personal income tax (PIT) or collecting taxes, fees or charges, organizations withholding PIT or collectors of taxes, fees or charges (hereinafter referred to as “collector”) shall prepare and give certificates of PIT withheld at source or PIT withholding receipts to persons whose income is withheld or payers of taxes, fees or charges (hereinafter referred to as “payer”).
The certificate of PIT withheld at source in Vietnam is a document prepared by the tax collector when withholding PIT for persons whose income is withheld.
Income payers that have withheld PIT must provide a certificate of tax withheld at source at the request of individuals whose income is withheld in the following cases (except for cases where the individual has authorized tax finalization):
- Income of non-resident individuals
- Income from salaries and wages
- Income from activities of insurance agents, lottery agents, and network marketing.
- Income from capital investment
- Income from transferring securities
- Income earned by non-residents from transferring contributed capital
- Income from winning prizes
- Income from royalties and franchising
- Withholding tax in other cases (10% tax withheld at source before paying income).
Do employees who conclude labor contracts for less than 3 months in Vietnam have the right to request income payers to issue certificates of PIT withheld at source?
Pursuant to the provisions of Point b, Clause 2, Article 25 of Circular 111/2013/TT-BTC as follows:
Tax withholding and certificate of tax withheld at source
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2. Certificate of tax withheld at source
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b) Issuance of certificates of tax withheld at source in some particular cases:
b.1) If the person does not sign a labor contract or signs a labor contract for less than 03 months, the person is entitled to request the income payer to issue the certificate of tax withheld at source every time tax is withheld, or issue a single certificate of tax withheld at source for multiple withholdings in the same tax period.
Example 15: Mr. Q signs a service contract with company X to cultivate ornamental plants on the company’s premises once per month from September 2013 to April 2014. Company X pays an income of 03 million VND per month to Mr. Q. In this case, Mr. Q may request company X to issue monthly or one certificate of tax withheld at source, which reflect the tax withheld over the period from September 2013 to December 2013, and one certificate of tax withheld at source over the period from January 2014 to April 2014.
b.2) If the person signs a labor contract for more than 03 months, the income payer shall issue only one certificate of tax withheld at source in a tax period.
Example 16: Mr. R signs a long-term labor contract (from September 2013 till the end of August 2014) with company Y. In this case, if Mr. R is required to settle tax at the tax authority and requests company Y to issue the certificate of tax withheld at source, company Y shall issue 01 certificate which reflects the tax withheld from September 2013 till the end of December 2013, and 01 certificate for the period from January 2014 till the end of August 2014.
Thus, according to the above regulations, employees who conclude labor contracts for less than 3 months have the right to request the income payer to issue the certificate of PIT withheld at source in 02 ways:
- Issue the certificate of PIT withheld at source every time tax is withheld;
- Issue a single certificate of PIT withheld at source for multiple withholdings in the same tax period.
What are the contents of a certificate of PIT withheld at source in Vietnam?
Pursuant to the provisions of Clause 1, Article 32 of Decree 123/2020/ND-CP, the contents of a certificate of PIT withheld at source in Vietnam are:
Contents
1. A certificate of PIT withheld at source contains the following information:
a) Name, form number, reference number and ordinal number of the certificate of PIT withheld at source;
b) Name, address and TIN of the applicant;
c) Name, address and TIN of the taxpayer (if available);
d) Nationality (if the taxpayer is not a Vietnamese citizen);
dd) Taxable income, time of income payment, total taxable income, PIT amount deducted, income amounts received;
e) Date of the certificate of PIT withheld at source;
g) Full name and signature of income payer.
In case of electronic certificate of PIT withheld at source, digital signature is required.
Thus, according to the above regulations, a certificate of PIT withheld at source in Vietnam includes the above 07 contents.
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